The improvements make the service more competitive with Dropbox and Google's upcoming GDrive service.

Most important, there's a new SkyDrive desktop app that adds a SkyDrive folder to Windows Explorer, so you can treat cloud storage exactly as if it were on your PC. (Why Microsoft didn't do this five years ago is a mystery.) Once you put files in there, they are accessible over the Internet via SkyDrive.com.

But the best thing about SkyDrive was its generous free storage allotment: 25GB. That's going away.

Starting today, Microsoft is capping the free tier at 7GB. If users need more, they'll have to pay $10 a year for 20GB, $20 a year for 50GB, or $50 a year for 100GB.

If you were a SkyDrive customer before April 22 (Saturday), you can keep getting your full free 25GB, but only if you take the following steps: